Seeking Alpha
Profile| Send Message| ()  

It really can be fun to speculate on new Apple (AAPL) products, which by the way is all that I am doing. However, I am going to speculate from a different angle than most “techies” in that I am going to speculate on how this device may sell in the business world. I have no doubt that they will sell a ton to consumers!

Writing about Apple always produces a ton of comments, so I encourage you to read this part before commenting. I have a unique perspective in this space as I have worked in the cellular space for over a decade, specializing exclusively in wireless data deployments (starting from CDPD and Analog, to 1x/GPRS, to EDGE/EVDO and now on HSPA). I have worked on thousands of deployments, comprising hundreds of thousands of units. Finally, I now own/operate a wireless data solutions company that specializes in working with customers to find wireless solutions to meet their critical business needs. Hopefully, that adds some credibility to what I am going to say.

Since no one knows if there will even be a tablet, no one knows the exact specs that one might have. I am going to use some of the “speculation” from CNN to gauge what it might look like: Price point between $600-$1000, 10 to 12” very high resolution screen, embedded 3G Wireless, Wi-Fi and web cam, and it will run an OS more resembling the iPhone than the Mac OS.

Will the business world adopt this device or will it be a consumer only play?

First off, tablets are not new to the business world. Companies such as Intermec and Symbol (now Motorola (MOT)) have been selling rugged tablets for industrial use for years in such markets as delivery, inspections and manufacturing. Also, companies such as Toshiba (OTCPK:TOSBF) and many others have been selling consumer grade durable tablets for years for many other markets, such as for business users who like to take hand-written notes. Knowing Apple (as we all do), they will be pushing the envelope on the tablet by introducing some great communications/entertainment functions that will sure appeal to the consumer, but will business buy it?

Certain devices / form factors now have a strong hold on the mobile business market. Below are some thoughts on how Apple might fare against these devices….

PDA vs the Apple Tablet

While the iPhone is undoubtedly a really cool device and has been a home run for Apple, not as many corporate customers have bought it as one might think. The main reason is simple, corporate email access. Despite advances in Exchange’s ability to push out email to Windows Mobile and iPhone devices, the BlackBerry is still the undeniable leader in this space. The main reason has to do (quite ironically) with the same principle that has propelled Apple to lofty heights, being that RIM (RIMM) controls all aspects of the device and email experience through a contained model. This, combined with the extremely high level of security and controllability of devices, has helped to propel the BlackBerry to its lofty levels in the corporate world. Although there is an emergence of new technologies to allow for a better corporate email experience for email on the iPhone and Windows Mobile devices, it still has a long way to go.

So, will the proposed tablet steal away some of the thunder from PDAs in the business market? I think there will be some movement towards a combined PDA / laptop for some customers who don’t wish to carry both; however, this will not likely make a big impact. The main reason is that moving to a tablet won’t eliminate the need for two devices, as one would have to carry a tablet and some sort of cellular phone anyways. So, the tablet is more likely to be used as a companion to a PDA than as a replacement.

Tablet vs. the NetBook

As a frequent traveler, I have found my beloved netbook to be great. First, they are so light, and take up much less space in your briefcase. Next, the smaller screen/size allows for a much easier form factor to use on a plane, especially when the seat in front of you gets inevitably cranked back! Finally, the battery life on them (especially the higher models) is quite good for a long journey. Many netbooks are either coming with an embedded 3G option, or are being partnered up with a USB cellular stick to allow for extremely usability away from the office.. These are becoming quite popular for sales, repair and other mobile teams who require a QWERTY style keyboard for entry, web access as well as access to key records stored on the device.

Is the proposed tablet going to steal away from this market? I’d have to say “little to somewhat”. The main issue here (for corporations) is going to be price, namely “Is there enough of a difference in performance/return on investment for me to justify paying 2-3x more for an Apple tablet vs. a conventional netbook?” For some users, such as those who need to pull down high resolution pictures for presentations or use for their work, there would be some benefit to justify the extra expense. For most, however, I wouldn’t believe so.

I think that there will be a large groundswell of salespeople and/or executives who will push for this device, but that may be namely for “killing time in the airport” with the great entertainment programs on the tablet. Also, one of the complaints about many netbooks, especially the 8 to 10” screen size versions, is the ease of typing due to its smaller keyboard, especially among many males with larger fingers. A lot of the tablet’s popularity may reside on the ability for quick keyboard entry. Along the same lines, working on a bed in a hotel room may be tough on a tablet, especially for long emails / documents. Most salespeople / traveling executives will likely stick to the the netbook / iPod combination that is now quite prevalent.

Tablet vs. Conventional Tablets

Ok, now we are getting down to the fun part. How much of the corporate tablet market will an Apple tablet potentially steal away from conventional tablets? In a word, "lots."

The level of success will be greatly determined by a few factors. First is price. If the price point is indeed starting around $600, this will make it very popular among those who do not require a rugged form factor for their work (although, there will no doubt be a flood of covers and cases to protect it soon after launch anyways). This would include the survey crowd, inspectors such as tobacco and health and health care professionals. I think the tablet could make a very large indent into this market, especially if there in an embedded 3G option at the lower price point.

Next is the usability of the device. Apple tends to be fabulous at making their products easy to use, so this likely won’t be an issue. Most current tablets today run some sort of Windows PC operating system or Windows Mobile, so Apple should be able to easily do well on this aspect.

Finally, the last point is durability, or since it doesn’t have a long track record, perceived durability. Consumers may line up for hours for the latest version of Windows or the iPod, but businesses tend to be much more conservative in their approach, taking on more of a “wait and see” attitude. It will be curious to see if corporations are willing to move faster than they normally do on such a device.

Tablet vs. Rugged Tablets

This is a space that Apple would be wise to not try to conquer too fast. The main reason for this category in the first place was the extreme conditions (temperature, shock, humidity, vibration) that these devices are put through. They are usually 3x or more in price than a similarly equipped non-rugged tablet, but most companies find the investment to be worth it due to the long-life nature, as well as the reliability to prevent unwanted downtime. The other important part are the rugged accessories, such as Impact printers, scanners and signature capture modules that are prevalent in this space are usually somewhat limited to the rugged lineups

It is important to note that while neither the iPhone nor BlackBerry has ever significantly cracked into the rugged PDA space to date, that is starting to change with the introduction of key accessories such as rugged enclosures and snap on-printers / signature capture modules for both devices. Time will tell if there is enough of a market for a 3rd party company to build similar accessories for the new tablet

So, is the new tablet going to be a success in the business market?

The answer depends on how you look at it, namely who is paying for the device. What I mean is that there probably isn’t a single salesperson/executive who travels who doesn’t have an iPod, so one might say that the business world is hot for the iPod. However, it is fair to say that virtually all of them are personally owned. I think the same will hold true for the tablet, when it comes to the business user. I have no doubt that you will see a ton of them in the hands of people at the airport, but most of them will be personally owned, at least at first.

In terms of business owned devices, it will undoubtedly do well against the current non-rugged tablets from day one, but may struggle to steal too much away from the PDA, netbook and rugged tablet markets, for the reasons above. In the end, considering how big of a success this thing would be in the consumer space, does it really matter anyways?

Ok, let the yelling and complaints begin!

Disclosure – Long RIM, no position in any PC or Tablet manufacturer. No position in Apple, Small long position in MSFT

Source: Apple's Tablet: Consumers Will Buy, But What About Businesses?